General Motors is to shed 2,500 jobs from its Adam Opel unit in the next two years under plans to return the European operations to profitability.

GM first unveiled the restructuring of Opel in August, after losses at the German car maker dragged General Motors' European business into overall loss, but said it would need until autumn to fine tune the details.

Opel chairman Carl-Peter Forster said about 1,600 of the job losses could not come through natural wastage. The company had earlier pledged to avoid layoffs.

No compulsory redundancies

The 1,600 staff will be offered voluntary redundancy or early retirement, said Mr Forster.

The brunt of the cut backs will be borne by the Bochum plant in Germany and in Antwerp in Belgium, which make the Astra model.

About 1,200 jobs will go from production lines and 400 from administration.

Opel's market share has declined to 12% - from 17% in the mid-1990s - as it has lost out to Volkswagen and BMW.

'Steep target'

GM brought in Mr Forster to restore the troubled car maker's fortunes by shedding thousands of jobs, cutting production by 15% and saving $1.8bn by 2003.

General Motors has already announced the closure of the Vauxhall plant at Luton

Mr Forster said an estimate of the likely cost of the reductions, which was 1bn euro, may now need to be revised, though he declined to give details.

"Bearing in mind the circumstances, it is an extremely steep target," he told a news conference.

The restructuring will also be felt at other European plants, he said.

GM's other European subsidiaries include British-based Vauxhall, which has already announced the closure of its Luton plant.

Profits down

The car maker plans to cut capacity by 15%, which means making 300-350,000 fewer vehicles.

GM's profits fell by 74% in the second quarter of 2001 compared with the previous year, hit by losses of $111m from its overseas businesses.

The European business performed worst of all, losing $154m in the second quarter compared to a profit of $166m during the same three months a year earlier.